Trends/Reversal patterns

Rounding top

A slow, curved rise and fall that looks like a dome.

Reversal patternsBest on 1Y, 3Y, 5YAlso called dome, inverted saucer

Illustration of the rounding top shape. It is a sketch, not real price data.

What it shows

A rounding top shows prices rising gradually, flattening, and then falling gradually. There is no single sharp high. It can take months or years.

It is found by fitting a curve and checking that the middle sits above both ends.

How we find it

The same code that draws it on your chart follows these steps, with the same result every time.

Take the closes of a window of at least 60 bars.
Fit a parabola to the closes.
Require the curve to open downward, fit with R-squared of at least 0.6, and have its highest point in the middle third.
Draw the fitted curve.

Starting values: Minimum bars 60; Minimum R-squared 0.6; High point position middle third. These are proposed and will be tuned on real price data before launch.

How to read it

The blue curve is the fitted dome.
The price path wanders around it.
A wide dome means the turn was gradual.

Status labels you may see

Label	What it means
Forming	A dome fit is valid, price still on the right side of the dome.
At the rim	Price has returned to the left rim level.
Failed	Price rose above the dome.

What cancels it

A close well above the top of the dome.

What traders check next

Volume at the top.
Whether the curve is smooth or jagged.
How long the dome took to form.

Limits

A curve can be fitted to many sets of prices.
It looks clearer in hindsight.
Slow turns are easy to miss in real time.

Try it in forecastviz

Open any ticker and choose Reversal patterns → Rounding top in the left menu.
Switch between 1Y, 3Y, 5Y to see how the picture changes.
Compare with Rounding bottom and V top on the same chart.

Open on a ticker

Questions

Is it the mirror image of a rounding bottom?

Yes.

Why use a parabola?

It is a simple smooth curve that has one turning point.